Survey Roundup: Power Risks, Low Priorities

A look at some recent surveys and reports dealing with risk and compliance issues. Send surveys and reports to wsjrisk@wsj.com.

Technology risks are a primary concern for chief audit executives at power and utility companies, an annual survey from PwC found. The survey found 31% of respondents saying IT auditors comprise between 21% and 30% of their department’s total resources, up from 17% in the 2012 version of the survey. Respondents ranked IT and cybersecurity as their biggest risks, with 84% saying their internal audits have covered information privacy and protection.

A survey of more than 150 senior finance and human resources executive found more than one-third said they consider compliance a low priority—and the same percentage said they would give their companies a grade of “C” for how compliance is handled. The survey from ADP Inc. found 59% said tax and payment system compliance has a positive impact on employee productivity and operational efficiency.

The allowance for loan and lease losses at financial institutions will likely increase by 30% to 50% if the Financial Accounting Standards Board’s proposed current expected credit loss model is enacted, according to a report from financial analysts Sageworks. The report said the model would require institutions to gather and compute up to 1,000 times more data—and the lack of required data could affect examiner’s safety and soundness ratings.

A survey of more than 5,100 executives in 95 countries found the highest levels of economic crime are reported in Africa (50%), followed by North America (41%) and Eastern Europe (39%). PwC’s 2014 Global Economic Crime Survey found 45% of organizations in the U.S. suffered from some type of fraud in the past two years, more than the global average of 37%–and 23% of those who reported their companies suffered economic fraud said it involved accounting, up from 16% in the 2011 survey.

Comments (1 of 1)

With the low levels of compliance, and the high risks from IT and cyber security, I believe that the HR departments at these companies should spend more time with their recruiting methods. With the high amounts of compromising of company resources by IT department, HR could reevaluate how these people are being hired, and use what they find hire new employees that would be more in line with company policy and culture.

Under the ASU, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling net realizable value or below the floor. The FASB did not amend other guidance on measuring inventory, such as the LIFO, FIFO and average cost method. In addition to reducing complexity, the proposal would make U.S. GAAP more comparable to IFRS.

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